Application Assignment: In-The-News
What are the different types of unemployment? (Briefly explain).
There are three types of unemployment:
Frictional unemployment: It is when companies or jobs looks for someone to fill a job
1. Explain how a firms production function is related to its marginal product of labor, how
a firms marginal product of labor is related to the value of its marginal product, and how
a firms value of its marg
Chapter 5 problems 3,4,7,8
Chapter 6 problems 5,9,10
3. Suppose the elasticity of demand for heating oil is 0.2 in the short run and 0.7 in the long run.
a. If the price of heating oil prices rise $1.80 to $2.20 per gallon, what happens to the
Q 2,3,4 P 1,3,5,6,9
2) Explain how absolute advantage and comparative advantage differ.
ABSOLUTE ADVANTAGE refers to the ability to produce a good using fewer inputs than
another producer. COMPARATIVE ADVANTAGE refers to the ability to
1. Give an example of a government-created monopoly. Is creating this monopoly
necessarily bad public policy? Explain
Government-created monopoly comes from the existence of patent and copyright laws
1) What is a competitive market? Briefly describe a type of market that is not perfectly
A competitive market is one in which there are many buyers and many sellers so that
each has a ne
1. What is the relationship between a firms total revenue, profit, and total cost? A firms
profit equals total revenue minus total cost
2. Give an example of an opportunity cost that an accountant migh
Questions For Review
1. How is economics a science?
There is a similarity in the sense that economics like science uses both theory and
observation. Testing theories or the scientific method is used throughout economics in order to
land on what
Questions For Review:
8) Why is productivity important?
Productivity is important because when productivity is high, the standard of living is
high. The more goods and services you can produce, the more goods and services can be
sold which trans
The central question in economics is how to:
A. make the best use of scarce resources to satisfy our unlimited wants.
The primary emphasis in macroeconomics is on:
C. the national economy.
Scarcity in economics means:
C. We do not have sufficient resource
1. Quantity demanded is the price a consumer is willing to pay for a specific amount of a good. For
example the price of flowers and chocolates during Valentine's Day increases by $5, the amount
of consumers willing to buy at
1. The term TANSTAAFL (There Ain't No Such Thing as a Free Lunch) is an acronym that expresses
the idea if something gives the appearance that it is free; there is always some type of cost. For
example, a complimentar
a. Unemployment is the number of people who are actively looking for work but aren't
b. The labor force is equal to the sum of employment and unemployment. This includes
people who are wor
a. The Rule of 70 states that the time it takes a variable that grows gradually over time to
double is approximately 70 divided by the variable's annual growth rate.
b. If the Annual Growth Rate in the US is 3%
1. CPI is the Consumer Price Index. CPI is a measure that examines the weighted average of prices
of a basket of consumer goods and services, such as transportations, food and medical card. CPI
is calculated by taking price
1. The business cycle is the short-run alternation between recessions and expansions. There are
four phases of the business cycle. The business cycle includes: peak, trough, recession, and
expansion. Recession is also known a
1. If the Ms increases, in the short run, the interest rate falls. But overtime, the aggregate
price level rises, and this raises money demand, shifting the money demand curve
rightward. The economy moves to a new long-run equ
1. The term There Aint No Such Thing as a Free Lunch. comes from the concept that no
matter what you do or buy, whether its going to the gym or studying longer, buying fast
food or cooking, even taking a free meal instead of gi
1. Unemployment is the total number of people who are actively looking for a job but aren't
currently employed. The groups that are counted towards the labor force are the employed, and
those that are actively looking for work
1. A. There is a recessionary gap occurring in the economy.
B. Multiplier = 1/(1-.8) 1/.2 = 5
15,000 B 13,500 B = 1,500 B (gap)
1,500/5 = 300 b
To close the gap, the government the government needs to spend 300 Billion more, t
1. The business cycle is a series of cycles of expansion and contraction. There are four
phases of the business cycle. The economy starts with expansion, which is when the
economy is going through growth and things are going acco
The aggregate demand curve slopes downward in part because as the price level falls, the ability
of households and firms to borrow cheaply increases.
The aggregate supply curve shifts for three reasons: (1) Changes in expectat
1. A change in quantity demanded means the actual amount of something consumers are
willing to buy has either increased or decreased, usually caused by a change in price
which causes movements along a demand curve.(example- when the price o
1. Money is known for having three functions or services that it provides.Money serves as a
medium of exchange, as a unit of account, and as a store of value. Medium of exchange.
Money's most important function is as a medium
1. The rule of 70 is the number of years it takes for real GDP per capita to double is equal
to 70 divided by the annual growth rate of real GDP per capita.
b. It would take approximately 23 years for GDP to double. 70/3
1. CPI is the Consumer Price Index and measures the cost of the market basket of a typical
urban American family. It's constructed to represent the consumption of a typical family
of four living in a typical American city. Yes
1. A. decreases.
d. the demand increases while the supply decreases. Increases.
2. Physical capital is a factor of production, such as machinery or buildings. Human capital is
improvement in labor for
At March 31 Streuling Enterprises, a merchandising firm, had an inventory of 45,000 units, and
it had accounts receivable totaling $95,000. Sales, in units, have been budgeted as follows for the
next four months:
Streuling's board of directors has esta
1. Sanford manufacturing manufactures specialized scientific calculators. They sell for $85.
Selected data for last year operations are as follows:
Units in Beginning Inventory
Fixed OH in beginning inventory balance